JSE Gains as Godongwana Tables Budget Pointing to Stronger Fiscal Position
South Africa’s economic narrative on Wednesday was shaped by two dominant forces: a burgeoning equities market led by mining shares and a national budget that reshuffled the fiscal winners and losers for 2026.
The FTSE/JSE All Share Index rose 1.26% to close at 126,742, trading in a range between 126,130 and 127,187 and extending its year-to-date gain to 21.54%. In Parliament, meanwhile, Finance Minister Enoch Godongwana tabled a budget that pointed to an improved macroeconomic position, supported by stabilising public debt and higher mining revenue.
Market rally driven by resources
Mining shares once again dominated the JSE.
The Resource 10 index surged 4.82%, sharply outperforming other sectors. Precious Metals and Mining climbed 5.20%, while Basic Materials advanced 4.58%. In contrast, Financials fell 0.98%, Industrials slipped 0.15%, and the SA Property index declined 0.99%.
Among the leading gainers, Valterra jumped 10.3%. African Rainbow Minerals (ARM), Northam, and Gold Fields rose about 5% each. AngloGold Ashanti gained 4.63% to 2,006.85, marking a new 52-week high intraday.
The rally was underpinned by firm commodity prices. Gold rose 0.94% to $5,192.03 per ounce, extending its strong year-to-date performance. Platinum surged 5.50%, and silver gained 3.74%.
Elsewhere, performance was weaker. Spar fell 10.08%, Richemont declined 4.44%, and Sasol dropped 4.13%.
The rand strengthened modestly, with USD/ZAR at 15.88, up 0.60% on the day.
Budget 2026: Who wins
Finance Minister Godongwana’s 2026 Budget reflected stronger-than-expected revenue collection, largely buoyed by the ongoing commodities boom.
Personal income tax brackets and medical tax credits will be adjusted for inflation, the first such relief in three years, while capital gains and donations tax exemption thresholds have been increased. Contribution limits for tax-free investment savings accounts and retirement funds also rise, offering further breathing space for households.
Small businesses will benefit from several targeted measures. Asset disposals of up to R15 million are now exempt from capital gains tax, a 50% increase on the previous threshold. VAT registration thresholds are set to rise, and turnover taxes for micro businesses will be adjusted for inflation, easing compliance pressures and improving cash flow.
Construction companies stand to gain from a massive R1.07 trillion in infrastructure investment over the next three fiscal years, focusing on logistics, energy, water, and sanitation projects. With state capacity stretched, this is expected to create significant contracting opportunities across the sector.
Security forces also received a boost, with an additional R1 billion allocated to both the police and military to strengthen efforts against organised crime. Bondholders can take some comfort from National Treasury projections: the borrowing requirement has fallen considerably compared with a year ago, and the budget deficit is expected to be slightly lower than previously forecast. These trends should support lower bond yields, benefiting holders of existing debt.
However, not everyone comes out ahead. Smokers and drinkers face a 3.4% increase in taxes on alcohol and tobacco from 1 April, with duties on beer, wine, spirits, and cigarettes all climbing. Motorists and commuters will also feel the pinch, as the general fuel levy, Road Accident Fund levy, and carbon taxes rise. Taxes on 93-octane petrol, for instance, will increase by 21 cents per litre to R6.58, adding pressure to household budgets already grappling with inflation.
Eskom and municipal debt intervention
A major structural intervention was also announced.
Under the newly introduced Distribution Agency Agreements, Eskom will assume power distribution from defaulting councils. Municipalities that refuse the conditions will be removed from support programmes and become liable for the full extent of their debts.
To strengthen revenue collection, the government allocated R2.5 billion over three fiscal years to a smart-meter programme. More than 139,000 meters have already been installed in distressed municipalities, with plans to roll out another 96,400.
Eskom’s finances have improved, primarily due to a R230 billion government debt-relief programme, of which R140 billion has been disbursed. The utility recently reported its first profit in nearly a decade.
Early Retirement Programme gains momentum
Since inception, 7,687 applications have been approved, using R3.7 billion in funding. The programme is expected to generate net savings of R5.5 billion, with R2.6 billion realised in the current financial year, R1.4 billion in 2027/28 and R1.5 billion in 2028/29. Godongwana allocated an additional R340 million to support the initiative.
Up to 30,000 state employees are expected to opt for early retirement. Workers aged between 55 and 60 may receive two weeks’ pay for every year worked, up to 20 years, and one week’s pay for each year thereafter. Penalties for early retirement are likely to be waived.
The programme aims to reduce the public sector wage bill by incentivising older, higher-earning employees to exit, while enabling departments to recruit younger, relatively cheaper staff. Treasury estimates average annual savings of R7.1 billion over the medium to long term.
Global corporate developments
In international corporate news, a renewed bidding contest emerged for Warner Bros Discovery.
Paramount Skydance Corp submitted a revised $31-a-share buyout proposal, up from its previous $30 offer, potentially surpassing Netflix’s existing $27.75-a-share agreement. The revised proposal includes a 25-cent per share quarterly “ticking fee” after 30 September if regulatory approval is delayed, and a $7 billion reverse termination payment if regulators block the deal.
Warner Bros said it will continue discussions with Paramount, while allowing Netflix four business days to respond if the board supports the revised offer. The proposal values the transaction at about $108 billion including debt, compared with Netflix’s $82.7 billion valuation on the same basis.
Paramount reaffirmed it would cover the $2.8 billion termination fee owed to Netflix should Warner Bros scrap the existing agreement.
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